Why 'Guitar Hero' is rockin' the game charts

Last week, Activision announced that Guitar Hero III: Legends of Rock, the latest iteration of its hit video game franchise, had hauled in $115 million in its first week of sales.

That's not bad, especially when you consider that most movies don't make that much in their first week. The numbers do pale, however, in comparison to the $170 million Halo 3 earned on its first day earlier this year.

For Activision, the instant success of Guitar Hero III is proof that its reported $100 million purchase of the game's publisher, RedOctane, has paid immediate dividends. And it puts a great deal of pressure on Harmonix, the original developer of Guitar Hero, to do well with its own new title, Rock Band.

But there is little doubt that fans of the original Guitar Hero are still fans of Harmonix. So there is equal pressure on Activision and its game developer Neversoft going forward to prove that they can sustain the franchise's leadership position.

In the wake of last week's sales record, Dusty Welch, RedOctane's head of publishing, talked to CNET News.com about the game, its heritage, its future, and the competitive landscape it now faces.

Q: Explain your role for me.
Welch: I'm responsible for the studio and development efforts behind the Guitar Hero franchise, as well as franchise development and the overall global brand management of the franchise. I'm a 10-year Activision veteran. I was brought on to RedOctane after Activision bought it in 2006.

Why do you think Guitar Hero works as a franchise?
Welch: First and foremost, it is uniquely tapped into a desire by consumers to fulfill their fantasy of becoming a rock star. You have popular-culture media and entertainment that has really ushered in this notion of music and fame such as American Idol, and I think that Guitar Hero being the first real product to bring music to the mass market in a very interactive entertainment way is capitalizing on this pop culture phenomenon of music attachment to lifestyle...I, too, as person sitting at home, can maybe one day aspire to and achieve success as I see on American Idol and Dancing with the Stars.

Also, there is this unique marriage between the hardware and the software that really lets people have a deep experience with a game for the first time and it does so in a nonthreatening way. It is easy to pick up and challenging to master.

On the software side, it was about that promise that you deliver of being the musician--in this case the lead guitarist--or about really becoming a rock star, and I think that that fantasy is primal.

That sounds like what Nintendo says about the Wii. Do you see some parallels?
Welch: Without a doubt. You look at what Nintendo has been able to accomplish with its very unique controller interface and simple-to-pick-up gameplay and hardware, and what it is doing to create new audiences, and there is a very strong correlation between the success of pioneering interactive seamless hardware with an entertainment experience that both the Wii and Guitar Hero uniquely provide in consumer entertainment.

What is Activision able to bring to the table that wasn't possible for the franchise when it wasn't part of a large organization?
Welch: Really, it is the publishing know-how, the global might behind the organization, and the resources that an Activision can bring to bear as a major publisher. By that I mean that there are strengths and economies of scale that can be brought to bear on the sale side of the equation where we believe we have the class-leading global sales organization in the video game industry.

Also, there's the in-store presence behind our franchises and our launches, much like you would see with the major launch of a movie. I also think that there are development capabilities that a company like Activision can bring to bear.

How has Neversoft's influence made Guitar Hero different than when it was made by Harmonix?
Welch: Neversoft is obviously one of the premier developers in the industry with a 10-year track record of launching a game every single year and being in the top of the charts. Neversoft has always incorporated music in innovative ways into their games. I think we are really able to take the franchise to new levels by putting in new interesting gameplay elements like bass battles and online play. Neversoft has also brought a better and deeper sense of music sensibilities to the Guitar Hero franchise.

Your press release announced that Guitar Hero III had $115 million in first-week sales. I wonder what you think that figure, plus the $170 million first day sales for Halo 3, say about the game industry and games' place in entertainment right now?
Welch: First, this is the largest launch in the history of Activision. It has also helped to make Guitar Hero the No. 1 franchise in North America to date in calendar 2007. This franchise, which is only a few years old, has now taken the dominant spot in this once very niche rhythm-music-based category, which has blossomed into a casual entertainment proposition that consumers from all walks of life are playing, whether you are 12 to 40, you are a female or male gamer, if you are not even a gamer...I think the launch of Guitar Hero III is as big as any movie studio could ever hope for out of an opening weekend. In fact, Guitar Hero III opening sales were equivalent to the No. 13 all-time high box. This franchise has been able to come on to the market and really take its seat at the table as one of the premier entertainment properties in any industry now.

How much of Guitar Hero's heritage comes from earlier games like Dance Dance Revolution?
Welch: Certainly, I think games like Dance Dance Revolution, Karaoke Revolution, Donkey Konga, and a few others really paved the way. Guitar Hero started out really as an opportunity to play that perfect marriage between the hardware and the software. On the software side, it was about that promise that you deliver of being the musician--in this case the lead guitarist--or about really becoming a rock star, and I think that fantasy is primal.

It has been heightened in the last five years by the popularity of iPod and iTunes, getting your music anywhere, anytime, any way you wanted, and it is important that music and your participation as a fan can play in that interaction.

What does it mean for the market that there is both Guitar Hero and Harmonix's Rock Band now?
Welch: I think it speaks volumes in terms of the interest that consumers have in music-based gaming. And certainly success breeds competition. I believe that there is room in the space for multiple products to exist. As I've said, Dance Dance Revolution, Karaoke Revolution, those products existed in the marketplace before Guitar Hero. But the Guitar Hero franchise now has much greater than an 80 percent market share, so competition has existed, and competition will continue to come out, but we are very confident that a franchise like Guitar Hero will continue to dominate the music space.

How will you win over fans who see Harmonix as the authentic developer and want to stick with them by buying Rock Band?
Welch: Consumers are really looking for this perfect marriage between the hardware and the software, and I think that's really a unique competitive advantage that Activision has. I think Activision and RedOctane have really proven and demonstrated that we have a tremendous advantage in this area, as RedOctane pioneered the hardware, but we also have tremendous expertise built up over the last several years in our manufacturing capabilities.

What's in store for the Guitar Hero franchise?
Welch: Well, I wish I could divulge all those plans, but I can't. But I will say that we are actively engaged in dialoguing with the audience, both today's current consumer and tomorrow's future consumer who could be anywhere from age 8 all the way up to the end of the scale, male, female, in every walk of life, in every territory in the world. And where there is music, there is Guitar Hero and there are very unique opportunities on multiple levels to engage this franchise with consumers.

Will there be any kind of user-generated content element, where maybe users can upload their own music, or something like that?
Welch: I am not aware of that opportunity today. I think that's an interesting concept. I think that there is probably some legal challenges that have to get resolved if you are talking about using master tracks or music that you own at home, but I think that ultimately, probably there is some type of user involvement from the community.

I think we are starting to see the tip of that now by building out a community involvement site that goes beyond blogging and talking and putting information together. It will really allow the audience for Guitar Hero III to have a good experience in the game, to go online for tournaments, to understand their ranking in a leader board, form up teams through the leaderboard and then go and engage and play each other. I think that is a natural progression and a leadership position that the Guitar Hero franchise is bringing to bear that is allowing users to really participate in the experience and help them to find the experience.